SIU hunts R161m UIF-TERS fraud kingpins

The Special Investigating Unit (SIU) will analyse evidence seized this week in KwaZulu-Natal and Gauteng and file for civil litigation to recover the millions of rands from the Unemployment Insurance Fund's (UIF) Covid-19 Temporary Employee Relief Scheme (TERS).

The SIU and specialised police units swooped in on a syndicate of 35 people representing 16 businesses who defrauded the UIF - TERS fund of R161 million.

Searches were conducted at Kenville in Durban, Port Shepstone, Anerley and Margate on the south coast, Pietermaritzburg, Sandton and Fourways and Pretoria.

The syndicate had exploited the financial safety net designed for vulnerable workers during the pandemic.

Among those being investigated were:

Gauteng based Nakomang Trading Enterprise which allegedly received over R19 million, and Lubelo Hlomuka Holdings trading as SA Scrum Assembly in KwaZulu-Natal and Gauteng(KZN/Gauteng). It is alleged they received R15.9 million.

Lubelo Hlomuka Holdings director, Nhlakanipho Mngomezulu, has identified by the SIU as the syndicate's alleged mastermind ("Mkhulu").

Bokoharama Construction, directed by Thamsanqa Madlala, allegedly received over R18 million.

Aventador Gate which is linked to R3.8 million in dubious benefits, along with numerous companies operating in KwaZulu-Natal.

Key individuals suspected of managing syndicate operations include Yolanda Nombuso Mgobo, who is alleged to have received and distributed over R18.6 million in syndicate funds. Searches were conducted at her residences in Scottburgh and Amanzimtoti, as well as at premises linked to her fiancé.

Also listed is Sphamandla Sokhela and attorney Nhlakanipho Zondi, the alleged proxies for Mngomezulu.

Senzo Gumede, director of companies Amakhosana Contractors and Senzisipho Pty Ltd was allegedly used to launder funds, while Sboniso Ronald Cele and Simtholile Dlamini were alleged "runners".

The operation, authorised by a warrant issued by the Special Tribunal, targeted offices, residences, and the UIF head office in Pretoria, SIU spokesperson Kaizer Kganyago, in a statement confirmed.

Kganyago said the scale of the operation underscored the urgency and seriousness of allegations against the accused connected to the fraudulent activities.

The SIU investigation has revealed that a sophisticated network orchestrated the submission of false TERS applications for individuals who were not legitimate employees of the applicant companies.

Rather than benefiting workers in need, the substantial funds allocated were allegedly redistributed among the syndicate's members, illustrating patterns consistent with money laundering.

"President Cyril Ramaphosa authorised the SIU to investigate allegations made in respect of the affairs of the Unemployment UIF in terms of Proclamation R.8 of 2021. The SIU investigated TERS payments to individuals who were not entitled to receive them and submitted false, irregular, invalid, or defective applications to the UIF, including the causes of such maladministration," said Kganyago.

He said the SIU also conducted searches at the UIF head office in Pretoria as the investigation identified several officials whose possible involvement is being probed to determine whether they facilitated fraudulent applications, bypassed audits, or cleared "victim" profiles from the UIF system.

He said the main assets seized on Thursday were electronics, including cell phones and laptops, as well as documents.

"The evidence will be analysed, and in line with our mandate, we will file for civil litigation to recover the possible losses that the state has suffered.

"The mandate of the SIU is to investigate and recover the loss the state has suffered. We do not have the power to institute arrests. However, when we find evidence pointing to criminal conduct, we refer it to the National Prosecuting Authority for further action. Part of this search and seizure is to establish the links of the syndicate and tighten the evidence that we have. Once all of that is complete, we can then make referrals to the NPA.

"We have seen our referrals from the NPA leading to arrests and convictions in other UIF-TERS investigations. We will continue with our working relationship to ensure that comprehensive justice is delivered," he said.

Kganyago said among the reasons for the search and seizure was to establish how many officials were involved in enabling the syndicate.

"Once that is done, we will make systematic recommendations and referrals for disciplinary action.'

He said he could not give a definite timeline for when the investigation will be completed.

"This is quite a complex investigation. It has many elements and moving parts, such as cyber, forensics, etc. We always aim to finalise an investigation within six months and at least complete the interim investigation report to the Presidency," said Kganyago.

SUNDAY TRIBUNE